Roadshow presentation November 2018 PAGE NUMBER Disclaimer 2 This - - PowerPoint PPT Presentation

Roadshow presentation

November 2018

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Disclaimer

This report (the “Report”) was drawn up and supplied by CFT S.p.A. (the “Company”) for information and illustrative purposes only. Therefore, the Report does not represent, nor can it be intended in any way as, a proposal for the conclusion of a contract, an offer to the public of financial products, advice or a recommendation to buy or sell any financial product, or an invitation to invest. The information contained in this Report shall not be considered complete and exhaustive, and the accuracy of the information cannot be guaranteed in any

• way. It should also be noted that the information contained in this Report and/or the assessments set out therein have not been subject to any verification

by independent experts or auditors. The Report’s drafting was based on data and information held by the Company and/or publicly available, and on parameters and assumptions established in good faith by the Company. However, such parameters and assumptions are not the only ones that could have been selected for the purpose of preparing the Report, and consequently the application of further parameters and assumptions, as well as the existence of different market conditions, might lead to analyses and evaluations that differ in part or entirely from those contained in the Report. Part of the information contained in the Report concerns future expectations and/or forecasts. Such information is based on estimates and projections by Company management, and by its very nature inevitably entails risks and uncertainties, since it refers to future events and circumstances. The actual results, performance and returns of the Company may substantially vary from those indicated in this Report or underlying such information. The content of this Report is also subject to amendments and/or updates, without the Company being held responsible for preventively or subsequently notifying such changes, in the event that said amendments and/or additions become necessary or appropriate. In any case, the content of this Report may not in any way be construed as a guarantee or an indication of the actual future economic and financial results

• f the Company. Therefore, insofar as the law permits, the Company and its representatives, managers, employees and consultants, shall not issue any

statement, offer any guarantee, take on any obligation, or assume any responsibility, concerning the accuracy, adequacy, completeness or updating of the information contained in the Report, or concerning any error, omission, inaccuracy or negligence present in the Report. This Report is the exclusive property of the Company; the Report and the information contained therein may not be copied, transferred, transcribed, distributed, published, reproduced or used for commercial purposes without the prior written authorization of the Company.

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Agenda

▪ CFT Group overview ▪ Financial highlights ▪ Strategic guidelines ▪ Appendix

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CFT in the food & beverage value chain

Farm Ranch Food and beverage producers Distribution Restaurants Grocery Food Service Commissary Consumer

Sorting Processing Packaging

LEADING CONSOLIDATOR OF PROCESSING, PACKAGING AND SORTING TECHNOLOGIES IN THE FOOD AND BEVERAGE MACHINERY SECTOR

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CFT well positioned to benefit of positive megatrends and key drivers

CONSUMER NEEDS FOOD PRODUCERS NEEDS CFT SOLUTIONS

• FOOD SAFETY
• HEALTHY AND HIGH QUALITY
• CONVENIENCE
• SMART PACKAGING
• READY TO EAT
• SAFETY AND QUALITY CONTROL
• ENERGY CONSUMPTION REDUCTION
• LABOR COST MINIMIZATION
• INCREASING PRODUCTIVITY
• REDUCE DOWNTIME
• CERTIFIED ASEPTIC PROCESSES AND

SORTING SOLUTIONS

• ENERGY SAVING MACHINES
• COMPLETE AUTOMATION
• GLOBAL SERVICE AND SUPPORT

URBANIZATION AND GROWING MIDDLE CLASS ENERGY SCARCITY AND STRICTER ENVIRONMENTAL REGULATIONS

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LEADER IN INNOVATION INTEGRATED PLATFORM GLOBAL EXPERTISE TAILORED TO CUSTOMER NEEDS COMPLETE PRODUCT PORTFOLIO DIVERSIFIED CUSTOMER BASE

CFT in a nutshell

OUTSTANDING TRACKRECORD GLOBAL PRESENCE & CUSTOMER BASE STRONG INTEGRATION CAPABILITIES

REVENUES >10% CAGR 2012-2017 LOW CUSTOMER CONCENTRATION 4 NEW ACQUISITIONS IN 2018 EBITDA > 15% CAGR 2012-2017 >85% REVENUES FROM EXPORT 80 M€ M&A FIREPOWER

TOP CUSTOMERS

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Revenues breakdown

122 M€ 61 M€ 24 M€ PROCESSING PACKAGING SORTING

Time to Market

~ 5/6 months ~ 5/6 months ~ 2/3 months

• Machinery

and systems for processing raw materials into semi-finished and/or finished products

• Packaging

and bottling machinery for liquid and viscous products

• Optical sorting and inspection

systems for performing quality control activities

207 M€(1) CFT GROUP

Technology

(1) 2017 Revenue (source: consolidated financial statements)

• Market leader in the Tomato

processing business

• High capacity plants
• Development in the craft brewery

industry

• Diversification of technologies and

processable products

• Opportunity to sell complete lines
• Integration with the Processing

Division

• Highly recognized positioning in

beer market

• Strong market growth
• High profit margins
• Leader in the salad market

Strengths

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Highly diversified and premium customer base

India Spain Italy Germany Holland Denmark Algeria USA Chile Argentina China Japan Australia GEOGRAPHICAL DIVERSIFICATION Sales in over 90 countries

• worldwide. Over

86% of revenue is generated abroad LOW CUSTOMER CONCENTRATION Due to the multi- year nature

• f

investments, the customer portfolio is constantly growing. The leading 5 customers generate less than 25%

• f

turnover and they change year on year Russia

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Strong M&A activities in 2018

Acquisition of 61.72% for 25 M€ -

• 100% call option

Leader in the beer kegging sector

• Completion of the Beverages product range, and particularly in the beer

keg filling

• Strong commercial and industrial synergies
• Business

integration with the German subsidiary Rolec Prozess und Brautechnik Gmbh for turnkey beer systems Revenues 33 M€ Entry into the secondary packaging market

• Completion of the End-of-Line range with the supply of

wrap-around packers and shrink-wrap machines

• Business integration in CFT turnkey lines
• Global market expansion through CFT Group’s sales team

Revenues 6 M€

Acquisition of 51% for 4 M€ - 100% call option

Business integration of high-added-value manufacturing activities

• Improved time and cost efficiency in critical value chain activities
• Business integration of a CFT-partner supplier of more than 10 years’

standing

• High level of service and supply reliability for all Group companies

Revenues 6 M€

Acquisition of 75% for 2 M€

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Agenda

▪ CFT Group overview ▪ Financial highlights ▪ Strategic guidelines ▪ Appendix

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Pro-forma financial highlights 2018

(1) Pro-forma data include asset unbundling, the merger with Glenalta S.p.A and results for the companies acquired in 2018 (2) Adjusted net profit is obtained by adjusting the amortisation relating to goodwill arising from merger and acquisition operations

REVENUES EBITDA NFP

(cash positive)

122 M€ 10,8 M€

• 8 M€

NET INCOME adjusted (2)

4.4 M€

HY1-2018 PRO FORMA (1)

▪ Pro-forma Revenues in the first half of 2018 amounted to around 122 M€ ▪ The Pro-forma Net Financial Position amounted to 8 M€ cash positive, mostly as a result of Glenalta’s capital contribution ▪ In order to comply with the applicable best practices, a project is underway aimed at a transition to IAS/IFRS international accounting standards, starting with the 2018 financial statements

REVENUES BY BUSINESS

▪ The Beer segment, further strengthened by the acquisition of Comac, proves to be the CFT Group’s primary market ▪ Owing to the contribution provided by Raytec Vision and the development of multi-purpose machines in the Processing division, Fruit & Vegetable plants account for more than 25% of 2018 pro-forma revenues ▪ The Tomato sector has fallen to 17% of pro-forma revenues in 2018, owing to the diversification strategy pursued in recent years

BEVERAGES 44% FOOD & LIQUID FOOD 54% NON FOOD 2%

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Strong growth in other business; tomato affected by cyclicality

2018 Revenues of machines and plants are forecasted to be up on the previous year, specifically:

• A strong rise in sales volumes in

the Beer business, thanks also to the acquisition of Comac

• Significant growth in the Fruit &

Vegetables business, in particular in Sorting technology

• The substantial development of

the Milk & Dairy business, mainly within the Processing division

• A significant reduction in the

Tomato business due to cyclicality

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Tomato business traditionally cyclical

▪ The sales volume

• f

full lines and machines for tomato processing is affected by the volatility of the underlying market ▪ The diversification strategy implemented over the past few years has allowed CFT Group to continue growing despite the high volatility of Tomato Processing turnover

World production of tomatoes for processing(1)

(1) Fonte: World Tomato Processing Congress

▪ The tomato processing market is characterised by high volatility, mainly due to climatic factors ▪ The variable volume of processed product against substantially stable demand causes strong price fluctuation that affects profitability for tomato by-product producers, and as a consequence affects their ability to invest in new production facilities.

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Positive outlook for 2019

• Strong

trend

• f
• rder

intake continuing also in 2018 with a considerable number

• f

negotiations currently underway

• CFT

group backlog1 as

• f

October 31st 2018, expected to be invoiced in 2019, 2% higher than as of October 31st 2017

• Backlog related to the tomato

business 10 M€ higher than the previous year

(1) Considering 2018 acquisitions on a like for like basis

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Agenda

▪ CFT Group overview ▪ Financial highlights ▪ Strategic guidelines ▪ Appendix

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Moving forward on our goal …

… to become the Italian leading Food & Beverage Technology Solution Provider

Strong M&A Activity Full potential of synergies

2018 2022 2012

Turnaround First M&A deals

EBITDA MARGIN EBITDA MARGIN

6,5%÷7%

EBITDA MARGIN

8%÷9% 10%-11%

REVENUES

8% CAGR Investments 69 M€ Divestments 19 M€

100 M€ Acquisition line

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CFT mid-term guidance

Forecast

2018

Target

2022

More than

240

M€

From

8,0%

to

9,0%

ORGANIC GROWTH ACQUISITIONS > 4% CAGR

FOCUS ON:

• Sorting
• End of line & Robotics
• Core businesses

+1%

FOCUS ON:

• Procurement efficiency
• Industrial synergies
• Better product mix

60M€ - 70M€

FOCUS ON:

• Integration in CFT complete

lines

• Commercial synergies

+1%

FOCUS ON:

• Higher profitability
• «Fill the gap» with new

technologies

More than

350

M€

From

10,0%

to

11,0%

REVENUES EBITDA

Profitability improvement through industrial synergies and different product mix Growth opportunities through acquisitions and internal development

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Significant room for growth through acquisitions and internal development

Tomato Fruits & processed vegetables Fresh vegetables Edible oil Cheese FOOD Beer Spirits Water BEVERAGES Milk Milk-based products Formulated products Yogurt Baby food Plant based drinks LIQUID FOOD Lube oil NON FOOD PROCESSING PRIMARY PACKAGING SORTING SECONDARY PACKAGING PRODUCT TREATMENT

▪ In the Sorting sector, thanks to Raytec Vision, CFT Group can provide high technology optical sorting and quality control solutions for several products in the Food sector ▪ With over 70 years of experience of Rossi&Catelli and Manzini brands, CFT is leader in the food Processing sector ▪ In the Primary Packaging sector, CFT provides filling and seaming solutions for several products and container types ▪ With the acquisition of Packaging del Sur, the CFT Group is able to

• ffer

solutions in Secondary Packaging that can be used for a wide variety

• f

products ▪ The Product Treatment Division’s heat-treatment machines can be used right across the food & beverage lines

• ffered by CFT group

Soft drinks TECHNOLOGICAL LEADERSHIP PRESENT WITH GROWTH OPPORTUNITIES (1) X-ray technologies (1)

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BEVERAGE

~60% ~ 15% ~ 25%

COMPLETE LINES DEVELOPMENT

• Engineering excellence
• Tailor-made solutions
• Long-term relationship with customers
• Integration of single machines in CFT complete lines

GROWTH OF SINGLE MACHINES

• Limited investments
• High profitability
• Directly managed by each legal entity
• Growth of installed base

FOCUS ON AFTER SALES

• High profitability
• Recurring sales
• Preventive and predictive maintenance programs

FOOD

Growing revenues streams

MAIN TARGET: INCREASE RECURRING REVENUES AND IMPROVE GROUP PROFITABILITY

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Agenda

▪ CFT Group overview ▪ Financial highlights ▪ Strategic guidelines ▪ Appendix

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History of the CFT Group

Since 1945, CFT has developed extensive know-how in the design and manufacture of machinery for the food industry, in both the processing and packaging sectors. Continuous investment in the development of new technologies, together with the acquisition of leading brands in their respective sectors, have led CFT to become a leading group operating internationally, and one that offers a complete range of products based on the most advanced technologies.

In 1945 Camillo Catelli started manufacturing tomato processing machinery, setting up the Rossi & Catelli Company In 1957 the patent of the first evaporator was registered In the 1980s innovation continued with new products such as the Eldorado enzymatic inactivator In 2011, SBC was acquired and CFT expanded into the beverages sector. In the 1970s, CFT launched the Vesuvio peeler, the Venus and Califfo evaporators and the Stematic Long Run and Olimpic sterilizers, with various applications in the dairy sector The 1990s saw a boom in tomato processing in China- and Rossi & Catelli strengthened their industrial presence in the sector, also through the acquisition of FBR Elpo In 2001 the Sacmi & Catelli JV was created,

• wned by Sacmi (60%) and the Catelli family

(40%), with the purpose of making acquisitions within the processing & packaging sectors. In 2001 Raytec Vision was established, and FBR Elpo joined the JV in 2003. In 2005 Rossi & Catelli acquired Manzini and

• Comaco. In 2006 CFT Packaging was set up

by merging Comaco and Sima, a company acquired in the same year. Rossi & Catelli and Manzini together became CFT. In 2007, after the winding up of the JV with Sacmi, Raytec and FBR Elpo remained part of the CFT

• Group. The first branches

were established in China and Ukraine. In 2012, CFT and CFT Packaging merged into a single company providing both processing and packaging solutions. In 2013, FBR Elpo was sold. In 2016 CFT invested in Rolec, a German brewery plant manufacturer, with a view to strengthening its presence in this sector. In 2015 CFT sold Bertoli (pumps and homogenizers) to the Interpump Group. The End-of-Line and Product Treatment Divisions were established, this

• peration also

comprising the acquisition of Labs In 2017 Levati Food Tech, a company specializing in pasteurisation and sterilization processes, as well as end-of-line processes, was acquired. Furthermore, the Technagro partnership was strengthened as the latter company joined the CFT Group In 2018, the merger with Glenalta (a SPAC) was finalized, resulting in approximately 80 M€

• f capital being raised.

Since 30 July 2018, CFT has been listed on the AIM Italia market. Acquisitions have continued throughout 2018 - ADR, Packaging del Sur and Comac have joined the Group and a minority stake in Milk Project has been acquired.

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Focus 2016-2018

60% 100% 80% 70% 61.72% 51.03% 75% 40%

2018

Nov 2017 Mar May Jul Sep Nov 2018 Mar May Jul

Investor presentation

Apr 5

ADR

Apr 16

Packaging Del Sur

May 5

Co.Mac

Jul 17

First day of trading

• n the AIM Italia

Market

Jul 30

Milk Project

Aug 2

Business combination announcement

Feb 27

Labs

Nov 17

Rolec

Nov 4

Levati

Jun 22

Techn'agro

Jul 5

2016

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Advanced robotics solutions Packers …….

Strategic view and key investments

INTERNAL DEVELOPMENT INTERNAL DEVELOPMENT + M&A PROCESSED PRODUCTS STRATEGIC CHOICE M&A TECHNOLOGY STRATEGIC CHOICE SECONDARY PACKAGING INTERNAL DEVELOPMENT INTERNAL DEVELOPMENT + M&A OPERATIONS STRATEGIC CHOICE ……. Mechanical constructions SUPPLY CHAIN INTEGRATION M&A

Completion of the product range in the Beverages sector, in particular that of beer, following entry into the KEG market Strengthening the Milk & Dairy sector by broadening the product portfolio (production of fresh cheese) and effective commercial synergies Strengthening of the secondary packaging sector and integration in CFT turnkey product lines Improved competitiveness as a result of the internalization of high- added-value key activities (manufacturing activities)

Tomato Fruits & processed vegetables Fresh vegetables Edible oil Cheese FOOD Beer Spirits Water Milk Milk based products Formulated products Yogurt Baby food Plant based drinks LIQUID FOOD Lube oil NON FOOD Soft drinks BEVERAGES

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CFT global footprint

70.00% - Techn’Agro 60.00% - Rolec Prozess und brautechnik 99.90% - CFT Iberica 51.03% - Packaging del Sur 100.0% - CFT Ukraine 100.0% - CFT Brazil 100.0% - CFT Packaging USA 100.0% - CFT Tjanjin 100.0% - CFT India 100.0% - GEV Ejendomme APS

• Rep. Office - CFT Moscow

35.00% - CFT Asia Pacific

• 100 % - CFT Vietnam

CFT S.p.A

75.00% - Raytec

• 50.0% - Raynext
• 24.0% - Gemini
• 5.00% - DNA Phone
• 1.08% - Xnext

61.72% - Co.Mac(1)

• 100 % - MC Inox
• 33.3% - Comac Pro

80.00% - Levati Food Tech (2)

• 100% - CFT Elettrica

100.0% - Labs 75.00% - ADR 100.0% - RAL Immobiliare (3) 40.00% - Milk Project (4) Sales office Production facilities

(1) Part of the group since 2 Aug. 2018 (2) At 30 June 2018 the equity investment was 75% of the capital (3) Company spin-off after 30 June 2018 (4) Part of the group since 10 Sept. 2018

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Corporate organizational chart

CFT Spa Raytec

(1)

Rolec Levati Food Tech Labs Raynext

60% 80% 100% 75% 50%

CFT Tianjin CFT Ukraine CFT Packaging USA Technagro

100% 100% 70% 100%

CFT Asia Pacific

(2)

CFT Brasil CFT India GEV Ejendomme APS

100% 100% 100% 35%

RAL Immobiliare

(3)

100%

Other minor investments

1)Raytec also holds 24% of Gemini, 5% of DNA Phone and 1,08% of Xnext; 2) CFT Asia Pacific holds 100% of CFT Vietnam; 3) Real estate company subject to spin-off

CFT Elettrica

100%

Co.Mac

61,72%

MC Inox ADR Packagin del Sur Milk Project

40% 75% 51,03% 100%

Acquisitions in 2018

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Business overview – Technologies and brands

PROCESSING PRIMARY PACKAGING SORTING SECONDARY PACKAGING PRODUCT TREATMENT

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Business overview – Product portfolio

Machinery and systems for processing raw materials into semi-finished and/or finished products Packaging and bottling machinery for liquid and viscous products Optical sorting and inspection systems for quality control operations Receiving and washing systems, peelers, choppers, extractors, refiners, mixer, cookers, evaporators, sterilizers, pasteurizers, aseptic fillers, processed cheese systems, breweries Volumetric, weight, telescopic, rotary, gas and vacuum fillers, electronic and vacuum seamers Optical sorters with cameras and pulsed-light sensors, X-ray machines and systems for inspecting food in cans, jars or bags

PROCESSING PRIMARY PACKAGING SORTING SECONDARY PACKAGING PRODUCT TREATMENT TECHNOLOGY MACHINES

End of line, wrapping and palletizing machines Palletizers and depalletizers, packers, pick and place, robotic systems Heat treatment solutions Tunnel pasteurisers, spirals, freezers, dryers, batch retorts, air separators, cooling system, portion formers

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Shareholding Structure

14.58% 14.58% 14.58% 4.86% 49.19% 2.20%

A lock-up agreement is provided for Glenalta Promoter:

• with regard to the ordinary shares held in the post-merger company and originating from

the conversion of the special shares within the scope of the merger or subsequent to the effective date of the merger, for a period of 18 months starting on the date of their conversion into ordinary shares of the post-merger company. A lock-up agreement is provided for the shareholders of RPC, A.E.A., Ma.Li and F&B Capital Investment :

• in the case of ordinary shares, for a period of 36 months from the effective date of the

merger;

• in the case of multiple voting shares, for a period of 48 months from the effective date
• f the merger.

On 27 February 2018 a new, renewable five-year shareholders’ agreement was drawn up, whereby RPC, A.E.A., Ma.Li and F&B Capital Investment’s shareholders undertake to: ▪ refrain from transferring any of the post-merger company’s ordinary shares, or the rights associated with such shares, for a three-year period; ▪ guarantee a pre-emption right, which may be exercised under certain terms and conditions, to the

• ther parties to the shareholders’ agreement, in the event of any share transfer by any one of CFT’s

shareholders; ▪ submit a single joint list for the appointment of the Board of Directors, with the name of Roberto Catelli as the first on the list; ▪ exercise the right to vote in compliance with the provisions of said shareholders’ agreement; hence, a voting committee is established, consisting of a representative for each CFT shareholder. The chairman

• f this committee shall be Roberto Catelli.

18.41% 18.41% 18.41% 6.14% 36.97% 1.66% SHARE CAPITAL VOTING RIGHTS

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Governance

Roberto Catelli Chairman Stefano Rossi Independent director Gino Lugli Director Daniele Raynaud Independent director Alessandro Merusi CEO Stefano Malagoli Director Guido Riccardi Chairman Andrea Foschi Standing statutory auditor Angelo Anedda Standing statutory auditor Livia Catelli Director Adele Catelli Director Martino Pozzi CFO PricewaterhouseCoopers S.p.A

AUDITING FIRM BOARD OF STATUTORY AUDITORS BOARD OF DIRECTORS

www.cft-group.com CFT S.p.A. Via Paradigna, 94/A - 43122 Parma - Italy